Breakingviews

Luxury groups could shrink their way to riches

December 30, 2015

Labels like Prada and LVMH have spent a decade expanding like crazy to meet emerging market demand. Burberry has tripled its store base. It’s time to go the other way. While cutting back will be painful, it could spur higher luxury valuations. Hermes is one that has it right.

Savoy and Plaza sale means trophies for all

December 9, 2015

Accor is buying the owner of the luxury London and New York hotels for $2.9 bln from its Saudi and Qatari investors. Adding higher-end lodging may help the French group make its online booking system more competitive. The price, however, looks too high to create much value.

Burberry poorly dressed for luxury’s chill winds

October 15, 2015

The British fashion label’s sales disappointed in the first half. It is highly exposed to Hong Kong and China, and scantily represented in Japan where Chinese tourists now shop. The U.S. is stormy too. Cost cuts help, but Burberry may just have its stores in the wrong places.

Yoox glee at Net-a-Porter exit may wear thin

September 3, 2015

Shares in the upmarket online retailer popped 5 pct as Net’s founder cashed out of the merger agreed in March. Terms of the severance deal with Natalie Massenet confirm that Yoox bought its rival at a bargain price. But it is losing know-how at an important time.

LVMH’s bite out of Apple is digital coming-of-age

September 2, 2015

The French luxury group has poached a top Apple music executive to head its online operations. It’s a significant move in a sector that has been wary of the net. It also cranks up the heat on the sector’s e-commerce leader Burberry and recently merged Yoox/Net-a-Porter.

Luxury faces tough quest for next big market

August 27, 2015

China’s slowdown and weaker currency have hit share prices of bauble-peddlers LVMH and Swatch. The hunt is on for luxury’s next hotspot. India and Brazil show promise, but a mix of scale, rising incomes and inequality is elusive. Better opportunities may be closer to home.

Review: China fails to live up to luxury hype

April 10, 2015

After a decade of red-hot growth, prospects have dimmed in luxury’s star market and given pause to high-end brands. With vigor returning to traditional hubs like the United States, a prediction that Chinese shoppers are establishing a Bling Dynasty looks premature at best.

Hermes shares look too glossy

By Pierre Briancon
March 25, 2015

The French group weathered luxury market headwinds well in 2014 and will pay a 530 mln euro special dividend. Rivals Kering and LVMH were hit harder but are recovering. That makes the silk tie-maker’s luxury valuation of 32 times forward earnings more difficult to justify.

Clock ticks for Swatch in Apple Watch challenge

March 17, 2015

Swatch CEO Nick Hayek is sanguine about the tech giant’s attempt to disrupt time. Yet he faces tricky options: lock horns with Tim Cook in a smartwatch war, or move upmarket where Apple will struggle to compete on craftsmanship. Swatch doesn’t look primed for either.

Coach tries LVMH model on for size with shoe buy

By Stephanie Rogan
January 6, 2015

The U.S. leather-goods purveyor is paying $574 mln for Stuart Weitzman, the first acquisition since its 1941 founding. While this looks like an admission its core brand has maxed out, Coach is betting it can use its know-how to expand other marques like LVMH and Kering have.